Forex Morning Commentary 11th February 2009

Forex

Gut Feeling

The market has certainly reacted adversely to the Bank bail out plan, as it has not boosted confidence as Investors believe that it will still leave the economy exposed to a further decline. The market is certainly jig sawing around, but it still seems that 10.23 is a tough nut to break and once again it showed its resilience at that level. I still think the level of 9.85 is bottomish and I expect the market to look at taking some profit initially and force ZAR back to 10.00 level. The trading range once again for the ZAR seems to be 9.75 to 10.40. It is still a bit premature to turn positive on the ZAR, as there is still a lot of uncertainty in the global market. Importers should also start looking at % covering, as there is a lot of bad news out in the market. I said the market would reverse it position of strength and looks like it has happened and I see the ZAR back above 10.00. The figures coming out of the USA are still bad and the US$ is under pressure. Market must exercise caution as I expect the market to be very volatile. Today will also tell us what to expect after the SA Budget speech this afternoon. I think with all the negativity around we must watch out for the dreaded word risk aversion as carry trades start to play havoc with emerging markets again. Keep an eye on Gold over the next few months as a safe haven commodity.

Data Releases

Wednesday       SA Budget Speech by Trevor Manuel

Wednesday       US Housing Fin Committee

Thursday          SA Mining Prod and sales

Thursday          US Retail Sales, Business Inventory

Rates

USD / ZAR       9.9385/9.9685

EUR / ZAR       12.8435/12.8935

GBP / ZAR       14.3545/14.3945

ZAR / JPY       9.0540/9.0740

EUR / USD      1.2920/1.2930

GBP / USD      1.4439/1.4449

USD / JPY       89.96/90.06

Morning Commentary